When we choose to invest attention in a given task, we say that we have formed an intention, or set a goal for ourselves. How long and how intensely we stick by our goals is a function of motivation. Therefore intentions, goals, and motivations are also manifestations of psychic negentropy. They focus psychic energy, establish priorities, and thus create order in consciousness. Without them mental processes become random, and feelings tend to deteriorate rapidly. Goals are usually arranged in a hierarchy, from trivial ones, like getting to the corner store to buy some ice cream, to risking one’s life for the country. In the course of an average day, about one-third of the time people will say that they do what they do because they wanted to do it, one-third because they have to do it, and the last third because they had nothing better to do. These proportions vary by age, gender, and activity: children feel they have more choice than their fathers, and men more than their wives; whatever a person does at home is perceived to be more voluntary than at work. Quite a bit of evidence shows that whereas people feel best when what they do is obligatory. Psychic entropy is highest instead when a person feels that what they do is motivated by not having anything else to do. Thus both intrinsic motivation (wanting to do it) and extrinsic motivation (having to do it) are preferable to the state where one acts by default, without having any kind of goal to focus attention. The large part of life many people experience as being thus unmotivated leaves a great deal of room for improvement. #RandolphHarris 1 of 23

Intentions focus psychic energy in the short run, whereas goals tend to be more long-term, and eventually it is the goals that we pursue that will shape and determine the kind of self that we are to become. Psychological disorders lead some people to shoplift. They include depression, obsessive-compulsive disorder, and kleptomania. These disorders can influence anyone to steal, regardless of what they look like, their demographic, or their salary bracket. Those who shoplift come from all walks of life, including celebrities and affluent people. For some people, taking something illegally provides them with a psychological benefit. It is not really about the actual item stolen, but more about the way the stealing makes them feel. Beyond disorders, however, personalities may play a role in shoplifting. A study done showed people who shoplift may often be characterized as unorganized, unreliable, unfriendly and antisocial. While not every act of shoplifting can be linked to a psychological fact, many are. Forty-nine subjects reported peer pressure as the primary motivation for their shoplifting. Peer pressure—the second most cited motive in the present study—may be a highly rational motive for behavior, as perceived by the offender. Approval from peers is one of the most powerful motivators of youthful behavior. This pressure might be direct, with respondents reporting that their friends explicitly encouraged them to commit the delinquent act. This pressure might also be indirect, with respondents stating that they were trying to impress their friends or simply act in conformity with them. #RandolphHarris 2 of 23

Two-thirds of all the subjects reported shoplifting because of peer influence at one time or another in their life. However, only those subjects who were in the earl stages of a shoplifting career or those who had shoplifted only a few times reported “peer influence” as the primary motivation for their current behavior. European-American respondents were 3-4 times more likely to report peer pressure as a motive for their behavior. Many of the professional thieves reported shoplifting due to peer influence, but they seemed to be referring to their early experiences. Twenty-two Sacramento students (15 males and 7 females) and 27 Sacramento informant (20 males and 7 females) listed peer influence as the primary motivation of their behavior. “My mom is a shoplifter. Both my sisters do it. I got it from them. My oldest sister said, ‘Don’t be stupid. Take what you want.’” (Sacramento: 20-year-old African-American female.) “I never stole anything in my life until I changed schools in the seventh grade. These girls had a sorority and to get in you have to shoplift something. They would tell you what to take…I had to get a pair of earrings from a Wal-Mart store. Red ones. It was too easy. I still do it sometimes.” (Sacramento: 22 year old European-American female.) In some cases, need or greed supplied the primary motive, but peer pressure facilitated the actual offense. One Sacramento subject state: “I had been wanting this CD and my friend started egging me on to steal it. I was afraid I’d get caught and stuff, but he just kept bugging me about it and finally I went in the store and put it down my pants and just walked out. I set off the alarm by the door, but they were too busy looking at a black kid, and I just ran out of the store. Now I can’t ever go back in there ‘cause they know what I look like.” (Sacramento: 19-year-old female.)  #RandolphHarris 3 of 23

These subjects shoplift for resale and much of their income is derived from shoplifting. Most, but not all, were or had been drug addicts with daily habits which ranged from $100 to $1,000. They engaged in a range of legal and illegal activities to support their habits. Most preferred shoplifting to other criminal activity because of the ease of committing the crime and the minimal sanctions associated with apprehension and conviction. Forty-six of the Sacramento subjects were categorized. In every case, these subjects looked on their shoplifting as “work.” One subject in Sacramento told the interviewer, “I’m a self-employed thief.” Typical responses included: “I changed from doing houses [burglary] to boosting cause it was getting too hot for me in Sacramento. I couldn’t go out of the house without being dragged down for some burglary I didn’t comment. I’ve been down to CDC [California Department of Corrections] two times already and I could get the “b*tch” [life imprisonment as a habitual criminal] next time so I went to boosting. It’s a misdemeanor. Oughta have changed years ago. Boosting is easy and safer [Y]ou steal a TV from a house and maybe you get $50 for it. I got a 32-inch LG at Wal-Mart last week and sold it for half the sticker price.” (Sacramento: 47-year-old Hispanic-American male.) “I make more than you do [referring to the writer] just stealing from stores. Yesterday I rolled up 6 silk dressed inside my shirt and walked out of Macy’s [an upscale department store in Sacramento]. They was worth over a thousand dollars and I sold ‘em for $300. That was 30 minutes work. (Sacramento drug clinic: 39-year-old European-American female.) “It’s like it’s my job.” (Sacramento drug addict: 35-year-old African-American female.) #RandolphHarris 4 of 23

Another common response to the motivation questions was, “I wanted [the item] and didn’t have enough money, so I lifted it.” This motivation was reported much more often by women (80 percent) than by men. Some of the women who reported this motivation were single parents with few financial resources. However, the majority simply coveted some item that they could not then afford to purchase. In many cases, this was one of the motivations for their first shoplifting experience. Five Sacramento student respondents (0 males and 5 females) and 36 other Sacramento subjects (8 males and 28 females) listed this as their primary motive for shoplifting. Typical responses included: “I want nice things for my family but I can’t afford to buy them. My husband and kids have the best wardrobe in town. My husband doesn’t know, but I don’t know how he doesn’t. Where does he think all this stuff some from? He never asks. Course, he doesn’t know how much anything costs. (Sacramento: 39-year-old European America female). “My mom wouldn’t buy me a pair of $30 jeans…so I took ‘em.” (Sacramento: 18-year-old African-American female.) Many expressed the belief that their acts were impulsive, committed without thought or planning. Nine Sacramento college students (4 males and 5 females) and 28 other Sacramento subjects (10 males and 18 females) reported impulse as primary motive for their shoplifting. Over one-half of all the subjects reported impulse as one of the motives for their shoplifting experiences. Typical responses included: “I want to say ‘spur of the moment.’ It was a watch and I just wanted that watch then. The amazing thing was that I had the money in my pocket to pay for it…I wish I could say that I had been drinking, but I can’t.” (Sacramento: 33-year-old African American male.) “It was sort of an impulse. I didn’t plan to do it. I’m really embarrassed by all this.” (Sacramento: 22-year-old European American female.) #RandolphHarris 5 of 23

Eleven of the subjects in the Sacramento diversion sample (7 males and 4 females) and six in the Sacramento student sample (3 males and 3 females) reported shoplifting only when intoxicated or under the influence of drugs. Many stated that they never stole when sober and blamed the disinhibition of alcohol or drug use for their crimes. In most cases, they reported taking minor items such as beer, cigarettes, or candy. Subjects reported: “Drinking causes it. I should stop altogether. Makes me impulsive. That’s when I take things. Usually I’m too drunk to be a good thief.” (Sacramento: 40-year-old African America male.) “When I’m drunk or stoned, it’s like I’m invisible. No, it’s like I’m that’s what always gets me in trouble. I’ll just walk in and take something and walk out.” (37-year-old European American male.) Many informants viewed shoplifting as a challenge and a thrill. They enjoyed the risk taking and many discussed the “rush” they received from the act. Many of the subjects reported “excitement” or “rush” as one of the motivations for their illegal behavior; however, only 15 informants, six Sacramento students (6 males and 0 females) and nine other Sacramento subjects (7 males and 2 females), considered this motivation as primary. “Its like an addiction. I like the feeling I get when I might get caught. Once you get in the car and you got away with it, it’s like, wow, I did it. It’s a buzz. An adrenaline buzz. I love that feeling—while I’m still in the store, my heart is pumping real loud and fast. It’s so loud I know people can hear it. I’m really scared, but once I get away. I’m exhausted.” (Sacramento student: 21-year-old European American female.) “It’s a thrill—the excitement, danger. Fear. Dude, my heart pounding like a drum. Like it was gonna come out of my chest. It made me feel alive.” (Sacramento: 20-year-old European American male). #RandolphHarris 6 of 23

A few informants reported that their behavior was beyond their control. This category is differentiated from the “Impulse” category by the subject’s assertion that they could not seem to stop. Many argued that they were addicted to shoplifting. There was significant crossover between those who reported compulsive behavior and those who reported shoplifting for thrill and excitement. Seven Sacramento students (0 males and 7 females) and six other Sacramento subjects (2 males and 4 females) reported that they could not easily control their shoplifting behavior. Typical responses include: “I don’t plan on stealing. I tell myself I’m not going to do it again and then I see something I want and I lift it. I already have it in my purse before I think about it. It’s like, you know, automatic pilot. I’m not addicted—that’s all I know.” (Sacramento student: 19-year-old European American female.) “I’m a kleptomanic. I steal anything I can get in my purse. The other day I stole a key chain—can you believe it? Took a chance on going to jail with a stupid key chain.” (Sacramento: 35-year-old-European America female.)  A small number of subjects reported shoplifting as a response to stressful life situations. Five Sacramento (2 males and 3 females) and five Sacramento students (0 males and 5 females) listed stress as the primary factor in their shoplifting behavior. Typical responses included: “I was working long hours and not getting along with my wife and we had a lot of bills and some sickness. I don’t know what happened to me. Next thing I know I’m stealing things. Books from Barnes and Nobles, cigarettes, meat from [grocery store].” (Sacramento: 40-year-old European American Male.) “I get depressed. Things start to pile up and I start shoplifting. Sometimes it’s at finals [final exams] or when I have a fight with my boyfriend. One time when I thought I was pregnant. Who knows why. It’s like I take out my feelings on them [the stores].” (Sacramento student: 24-year-old European American female.) #RandolphHarris 7 of 23

It is obvious, now, that to speak of shoplifting as having a simple causal dynamic, is to misunderstand the diversity and complexity of the behavior. When asked, “Why do you shoplift?”, the 320 shoplifters in this study revealed motivations that ranged from purely economic to apparent manifestations of emotional maladjustment. Most of the subjects reported that they shoplifted for some economic benefit. These subjects chose to seal as a means of satisfying their material needs and desires. Other satisfied some emotional need by their shoplifting activity. Still others sought to avoid some unpleasant or painful encounter or activity. These behaviors—satisfying economic or emotional needs—may be seen as highly utilitarian and rational. Motivations in these categories included: wanting the item but could not afford it; wanting the item but not wanting to pay for it; pressure from peers; stealing for a living; and feeling of thrill, rush or danger.  A small number of subjects reported that they stole to avoid the embarrassment of paying for condoms, to avoid long lines at the check-out station, to embarrass a spouse or parent, or to exact revenge on an employer or store where they perceived that they had been mistreated. Of critical importance, however, was the finding that people who shoplift steal for different reasons at different times. In the 115 cases more extensively interviewed, there were few individuals who reported a single, stable criminal calculus. An otherwise “rational” shoplifter might occasionally act impulsively, stealing some item for which he or she had no need or purpose. The informants often expressed bewilderment over their motives in such cases. #RandolphHarris 8 of 23

Of course, it is recognized that subjects may not have good insight into their own behavior or motives. Subjects may have reported their motive as “impulsive,” or “compulsive” because they could not articulate the dynamics of their behavior. Others may have reported stealing because of the disinhibition brought on by drugs or alcohol as a rationalization for behavior which they could not otherwise justify. This points out the situational nature of offending. The motivation to shoplift is closely tied to the offender’s current circumstances. In most instances offenders perceive the act as a means of satisfying some need. The “need” may be for cash, for some item(s) they wish to obtain for their personal use, or to satisfy some psychosocial need, such as revenge, self-esteem, peer approval, or for thrill and excitement. However, that same individual might also commit offenses without a clear motive. Several informants reported that they simply went along with friends who decided to shoplift during an otherwise legitimate shopping excursion. They joined in for no reason other than, as one information said, “It seemed like a good idea at the time.” Men seldom have clear objectives. They do not know exactly where they are going or what they want. To imagine that people carry out only projects that are conceived in advance and act in terms that are clearly foreseen is “sheer idealism.” A shoplifter may drift into crime on one day, following a friend or acquaintance, while on another occasion they may utilize a more thoughtful planning strategy before committing a crime. This type of offending is not the result of a thoughtful decision strategy, rather it “emerges out of the natural flow of events, seemingly coming out of nowhere. It is not so much that these actors consciously choose to commit crime, as they elect to get involved in situations that drive them toward lawbreaking. #RandolphHarris 9 of 23

Some “otherwise rational” shoplifters reported that they occasionally took an item, not out of need or because they wanted it, but because they could do so without being observed. In these cases, the relative lack of risk appeared to be the major factor in the offender’s calculus. If the circumstances were favorable, they were individuals with a “readiness” to commit offense, and they did so, even though they had no specific need for the item taken. Like the proverbial mountain that was climbed “because it was there,” these shoplifters stole because they could. Sixty informants reported occasionally committing offenses for what appeared to be nonrational motives. These included shoplifting as a response to stress, as a result of compulsion, impulse, anger, and alcohol or drug use. Such shoplifters often asserted that they did not know why the committed their acts or they did not understand their own behavior. The behavior was seldom obviously goal-oriented and it frequently did not have a significant acquisitive element. Many of these shoplifters took small, inexpensive items such as candy, cigarettes, and other nonsensical items such as kay chains or small toys for which they had no use. However, upon closer examination, we found that all of these individuals recognized that they had a tendency to “compulsively” or “impulsively” shoplift, and yet they consciously entered places of business for that very purpose. Others appeared to attribute their shoplifting to forces over which they had no control as a means of maintaining their sense of self-worth or to impress the interviewer with their “basic goodness.” #RandolphHarris 10 of 23

One informant summed it up, stating, “I’m basically a good person. Sometimes I lift things and when it’s over, I can’t tell you why. It’s not like me at all.” One college student reported that he never shoplifted unless he was drinking. Later, he admitted that he often had a few beets before going to a store in order to “get up his nerve” to commit the offense. The goals one endorses manifest themselves in predictable actions, emotions, and choices, in time becomes recognizable as a more or less unique “self.” These goals also determine one’s self-esteem. However, given that the general notion of interpersonal competence sets the framework for defining each of its components (health, intelligence, empathy, autonomy, judgment, and creativity), it is hoped that each component will be interpreted as an acquired ability for effective interaction, rather than in some context. To illustrate, creativity may refer elsewhere to artistic talent or scientific genius, but here it is confined to resourcefulness in devising new and effective responses to problematic interpersonal situations. Each component is conceived as a component of total competence. In any performance all six aspects of competence are manifested simultaneously, though one may be more obviously put to test than another. And the degree to which each be cultivated independently remains an empirical question. #RandolphHarris 11 of 23

The abilities designated are possess by individual family members in varying degrees, however much they may derive from common family experience or affect family structure and functioning. Nor is this the only reason for speaking of interpersonal rather than family competence. By including all intimate relationships such as fiancé, chum, or sibling long absent, futile controversy over who is a family member is avoided. Since our dependent variable is personality development, every significant other in the family constellation must be taken into account; and, the concept of quasi-families arises both to explain certain suggestive developments in urban sociability and to suggest self-conscious experimentation with identity-forming small groups. A number of theorists have endeavored broadly to classify the relationships among people according to the motives these relationships are said to express. Many years ago, the six basic interests were believed to generate all human associations: health, wealth, sociability, knowledge, beauty, rightness. Among the many schemes for classifying motives, this list is nearly cognate with the elements of interpersonal competence. Why such resemblances should occur is itself an inviting topic for speculation. An intriguing coincide of the same order was also discovered in the 1952 Annual Report of the Superintendent of Schools of New York City, which lists “what we want for our children” as: adequate knowledge and skills, good social character for living in a democracy, good health, sound thinking, creative expression and appreciations, adjustment of the World of work. #RandolphHarris 12 of 23

And Miss Ethel Kawin, Director of the Parent Education Project at the University of Chicago, in a progress report dated March 31, 1954, presented what an advisory panel of qualified scholars had approved as “the major essential characteristics of mature, responsible citizens,” and what such citizens require for “competent participation of the individual in a democratic social system”: feelings of security and adequacy, understanding of self and others, democratic values and goals, problem-solving attitudes and techniques, self-discipline, responsibility, and freedom, constructive attitudes toward change. Beyond the obvious differences and similarities of these lists and the elements of competence, two less visible assumptions involved deserve emphasis: that their authors aspired to completeness in the range of species under the genus imputed, and that the motives of persons and the goals of institutions do, can, or ought to converse. Some other writers, ore therapeutically and less educationally oriented, have attempted to define analytically the characteristics of mental health. At the 1953 National Conference on Social work, for example, Dr Marie Jahoda grappled with this quite metaphorical concept before an interdisciplinary symposium on the family. She first criticized previous conceptions which confused psychological health with: the absence of disease, statistical normality, psychological well-being (happiness), or successful survival. These criteria were inappropriate, she asserted, because they neglected the social matrix of human behavior. #RandolphHarris 13 of 23

“It follows that we must not conceive of psychological health as the final state in which the individual finds oneself, for this state s dependent upon external events over which one has no control. Rather, if things in the external World were all right, we should think of it as a style of behavior or a behavior tendency which would add to one’s happiness, satisfaction, and so on. Psychological health, then, manifests itself in behavior that has a promise of success under favorable conditions.” What are the psychologically relevant attributes of an environment which permit the manifestation of psychologically healthy behavior? This research task differs markedly from the etiology of mental disease. Any systematic effort to define normality in child development must include, even for small children, not only physical well-being, but such aspects of their behavior as effectiveness, originality, adaptability, trust, and confidence in self. There is a scheme of eight stages in personality development from infancy to maturity. Each of these stages is entitled according to the favorable or unfavorable personality characteristics in which they result. These emerge from successful or unsuccessful negotiation of the problems peculiar to each stage: trust versus basic mistrust, autonomy versus shame and doubt, initiative versus guilt, industry versus inferiority, identity versus role diffusion, intimacy versus isolation, generativity versus stagnation, ego integrity versus despair. #RandolphHarris 14 of 23

The fact-finding report of the Mid-century White House Conference on Children and Youth adapted the favored products of designating the attributes of healthy personality. The cultivation of these products is set forth as an implied objective for the various social institutions making up the community: the sense of trust, the sense of autonomy, the sense of initiative, the sense of duty and accomplishment, the sense of identity, the sense of intimacy, the parental sense, the sense of integrity. That the concept of interpersonal competence converges with certain other trends of current thought is thus as evident as that it diverges from certain lines of conceptualization. The chief condition for the working of offenders, apart from psychopathology, is passivity, the exact opposite to the condition which the ultimate concern requires for righteous working. Even when there is the surrender of the will to the ultimate concern, with active choice to do it will as it may be revealed, the ultimate concern require one’s cooperation with its ways, and the full use of every faculty of the whole human. The powers of the offender aim at obtaining a passive slave, a captive to their will; while the ultimate concern desires a regenerated man who is intelligently and actively both willing and choosing, doing its will in liberation from slavery of spirit, soul, body, and mind. The powers of the offender would make a man a machine, a tool, an automaton; the ultimate concern is sacred and love desires to make him a free, intelligent sovereign in his own sphere—a thinking, rational, renewed creation created after its own image. Therefore the ultimate concern never says to any faculty of man, “Be thou idle.” #RandolphHarris 15 of 23

The ultimate concern neither needs nor demands non-activity in a man for its working in and through him; but psychopathological spirits demand the utmost non-activity and passivity. The ultimate concern ask for intelligent action in cooperation with it. The offender demands passivity as a condition for his or her compulsory action, and in order compulsorily to subject men to his or her will and purpose. The ultimate concern requires the cessation of conduct disorder and psychopathological behavior. Passivity must not be confused with quietness, or the meek and quiet of a humble individual, which in the sight of the ultimate cause is of great price. Quietness of spirit, of heart, of mind, of manner, voice and expression, may be coexistent with the most effective activity in the will of the ultimate cause. The experience of the sacred, of the unconditional, takes place in a state of ecstasy in which the human spirit is grasped by ultimate concern and transcends itself. This description applies equally to faith, righteousness, and revelation; they are substantially the same. In faith, ultimate concern is considered more as it affects the individual in the center of one’ personality. The questions of doubt, risk, and courage here come to the fore. In righteousness, the symbolic expression of ultimate concern in myth and ritual and its embodiment in institutions receives more attention. For righteousness as ultimate concern drives toward expression, and it always includes within its scope virtue in the narrow sense. In revelation the manifestation of ultimate concern in a correlation of event and ecstasy receives the stress. For the ground of being grasps us through beings. These differences seem sufficiently marked and important to dispel confusion about the ultimate concern. #RandolphHarris 16 of 23

More important than either arms or wealth is the knowledge on which both are increasingly dependent. Japanese pupils often go to a juku, or cram school, after hours to improve their grades. Japan, as a nation, has been enrolled in one big juku for decades, working overtime to expand the country’s ultimate power source—its knowledge base. Ever since 1970, Japan has thrown itself consciously and enthusiastically into the race to create an informed-based economy. It started building its technological R&D capacity even earlier. In 1965 the number of scientists and engineers per 10,000 member of the work force was roughly a third that in the United States of America. By 1986 the ratio had surpassed that in America. The “knowledge-density” of its work force has been skyrocketing. Japan is pushing ahead in every advanced field from biotechnology to space. It has ample capital for R&D, and for investments in high-tech start-up firms anywhere in the World. It is advancing frontiers in superconductivity, materials, and robotics. In 1990 it became the third nation, after the United States of America and the U.S.S.R., to send an unmanned spacecraft to the moon. Its success in semiconductor chip manufacture have been astonishing. However, the World’s scientific-technological marathon is only starting, and Japan’s general technological base is still developing. Japan even now spends 3.3 times more money for royalties, patents, and licenses for foreign technology than it takes in from the sale of its own. Sixty percent of that is paid to the United States of America. Japanese weakness is evident in fields like parallel computing architectures, computational fluid dynamics, phased array, and other advanced radar-related technologies. #RandolphHarris 17 of 23

Moreover, Japan which is so advanced in the manufacture of computer chips and hardware, continues to be weak in the increasingly crucial field of software. Its much ballyhood attempt at a great leap forward—the “fifth generation project”—has so far proved disappointing. Financed by MITI, the Ministry of International Trade and Industry, the project was described as Japan’s equivalent of sputnik, the Soviets’ first space probe. Such was the advance enthusiasm that, in 1986, Dr. Akira Ishikawa of Aoyama Gakuin University in Tokyo said the Japanese saw the fifth-generation project as “nothing short of a mandate for their survival, a means of…self-sufficiency.” By 1989 it was reporting modest results. Even more significant, perhaps, Japan is being the development of “meta”-software, used for producing software itself. In a recent survey, 98 percent of Japanese CEOs conceded U.S.A. supremacy in software; 92 percent agreed that the United States of America was still in the lead in artificial intelligence and in supercomputers; 76 percent felt the same way about the computer-aided design and engineering. In the early laps of the R&D race, therefore, the United States of America is slipping. Japan is gaining fast, but there are still many laps to go. Knowledge-power, however, is not just a matter of science and technology. This is something Japan understands much better than the United States of America. As in chess and war, so in commercial or scientific rivalry: “Know your adversary” is still a vital rule. And here Japan is light-years ahead. #RandolphHarris 18 of 23

Japan knows infinitely more about the United States of American than the United State of America knows about Japan. Because Japan was militarily and politically dependent on the United States of America for decades, American decisions had an enormous impact on Japan. Japan needed to know American inside out. The pandemic crisis of 2020, the worst since the Great Depression, can be explained by a few major factors Unaffordable consumption and households deeper in debt. First, it was the crisis of consumption patterns and lifestyles. Many Western household had tiny savings and accumulated debts that were too big. Americans and Europeans have to ask themselves a simple, but very basic question: Are we living right? Are out lifestyles financially sustainable? Not all Western countries are similar in this regard. The United States of America is the most typical example of biased and adventurous consumption. Countries like Germany and Switzerland represent another pole. In 2022, the China’s average household income was $12,472.51 as opposed to the $70,784 average for U.S.A. households. In both China and the United States of America, the average family assets were about eight times its average income. However, the average U.S.A. household’s debt comprised 136 percent of its income, while the average ratio for a Chinese family was no more than 17 percent. Out of the Chinese families surveyed, 85 percent owned a home, but only 11 percent carried a mortgage on their property. #RandolphHarris 19 of 23

In the United States of America, as of 2022, 65.8 percent of Americans own a home, and 70 percent of the homeowners were carrying  debt on the property in the form of a mortgage or an equity loan. While in the United States of America mortgage debt is encouraged through a subsidy in tax code, China’s policy is to provide housing without high indebtedness—through employer home purchase plans for employees and so on. Less than 1 percent of the Chinese use consumer loans to purchase consumer goods. In the United States of America, 47 percent of the families have installment loans and 46 percent carry a credit card balance. Though China is cautiously encouraging a gradual expansion of consumer credit, it is clear that, as far as consumption patters and lifestyle are concerned, the two economic giants represent two opposite cultures: of living on debt and of not living on debt. It is not difficult to say which one makes the economy more vulnerable. A prudent household decides what and how much to consumer depending on its income. Income comes first, setting reasonable consumption limits. For many households in the West, starting from the United States of America, it is the reserve. First comes a consumption standard considered necessary to achieve or to maintain. If disposable income is not enough, borrowing increases up to the point where the standard is achievable. The standard itself depends not only on the personal requirements of every particular consumer, but also on the established perceptions of the consumption level relevant for a more or less well-to-do family; a house is should live in, a car it should ride, a set of durable goods it should have, and so on. You either meet his standard or lose the esteem of the people around you. #RandolphHarris 20 of 23

As time goes by, the standard is rising, often faster than the household’s incomes. It is here that the financial crisis mechanism starts to unveil. As the financial sector develops and offers a widening variety of lending schemes, households increasingly rely on loans, especially when interest rates are low. The lion’s share of the loans the get is accounted for by mortgages. The range of borrowers expands as lower-income households, often with a poor credit record, join in. Lending risks increase, but as long as the economy is growing, asset prices are rising (and they rise faster as more and more buyers emerge, tempted by easy credit), and growth expectations remain high, financial institutions continue to increase lending to marginal borrowers seeking to boost their business and assuming that the loans will be returned or at least that the collateralized assets will shield them from losses. The trend grows stronger as more and more debts are securitized: Lenders feel more risk-averse as they can get their cash faster and risks are dispersed. However, at a certain point marginal borrowers start to default, which, together with the burst of the asset bubble, drives the financial sector into the crisis. Dispersing risk through securitization only widens the range of the financial players suffering a blow. Not only lenders, but also borrowers have to bear heavy responsibility for this kind of crisis. If the national economy in question is large, the financial sector debacle, spurred by their irresponsible behavior, disables the national economy in general and also hits a heavy blow to the whole World. #RandolphHarris 21 of 23

Time has come to realize that in today’s globalized economy outrageous lending-borrowing games played by the Western households wishing to have much more than they can afford, and by financial institutions drive by greed and ignoring the very basic rules of prudent lending, hit a karate-style blow to billions of people around the planet. Also, with the COVID-19 disruptions and shutdowns and lockdowns, the economy and work force seized. The outrageous borrows’ defaults and the aggressive lenders lumps of non-performing loans unleashed a chain reaction of financial-sector agony, depression in the global economy, and finally the global downturn. During the economic boom of the mid-2000s, in most industrially developed countries of the West saving rates were declining and household debts rising amid an increasing availability of credit. Not surprisingly, consumer spending was growing faster than households’ disposable income. In the United States of America, household saving rates had been decreasing for more than20 years before they began elevating in 2008. As stocks and home prices were mostly going up, American families spent a growing portion of their incomes, reducing savings to near zero: In 2005-2007 saving rates experienced drops to a below 1 percent level. Seeking to consumer more, many Americans and Europeans did not hesitate to borrow. By 2007, the households’ leverage ratio (the ratio of household debt to disposable income) hit 199 percent in Demark, 191 percent in Ireland, 185 percent in the Netherlands, 143 percent in Italy, and 130 percent in the United States of America. #RandolphHarris 22 of 23

Household dept in the United States of America peaked in Q3 2008 at 155.6 percent of household disposable income. It then declined to 132.4 by late 2015. Growth in household debt levels accelerated from early 2016, so that the debt-to-income ratio rose again to 136.3 percent by mid-2017. In Q4 2022 it was 131.3 percent. The average Standard Variable Rate (SVR) was 7.41 percent in April 2023, up 3.3 percentage points on a year ago. The average 2-year fixed mortgage rate was 4.63 percent in April 2023, up 2.28 percentage points on a year ago. The U.S.A. nonprime loans disaster was caused by Freddie, Fannie, and the like, but also by American households whose incomes and purchasing power were too modest compared to excessively high standards they set for their homes. The problem worsened as the rise of the number of home buyers caused by easy access to credit pushed house prices further and further up, with average incomes deceasing by $14,000 from 2007, causing unprecedented high against disposable incomes. The COVID crises caused banks $565 billion in loan losses. However, can you expect borrows to take responsibility for their failure when they were forced to shutdown their businesses, forced to stay home from work and forced to get vaccines to be able to return to work months later, while they suffered having no income or drastically reduced incomes? They had the moral right to live in the houses they pledged to but failed to pay for. People are still suffering economically and trying to recover. There were 324,237 properties with foreclosure filings in 2022. However, in 2008, there were over six million home foreclosures. U.S.A. foreclosures jumped 22 percent in the first quarter of 2023, compared to the same period last year. The crisis has showed many Westerns are not at all as rich as they want to be, as they pretend to be, and as they seemed to be in other parts of the World. You have got to be more modest guy, but how can they when they are taught to spend to support the economy? #RandolphHarris 23 of 23